Noe v Ratzapper Australasia Ltd [2018] NZCA 597

Noe v Ratzapper Australasia Ltd [2018] NZCA 597 [18 December 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA724/2017[2018] NZCA 597BETWEEN ROBERT NOEFirst AppellantAND ATRAP INCORPORATEDSecond AppellantAND RATZAPPER AUSTRALASIA LIMITEDRespondentHearing: 25 October 2018Court: Miller, Clifford and Gilbert JJCounsel: D J G Cox for AppellantsW A McCartney for RespondentJudgment: 18 December 2018 at 2.30 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The appellants are jointly and severally liable to pay the respondent costs fora standard appeal on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)[1] An arbitral award for a sum of money is made in a private arbitration betweenthe appellants, the respondent and others. The award is made by default afterthe first appellant was debarred from defending the claim due to his persistent failureover a prolonged period to comply with his discovery obligations. The appellantsassert their legal advisors were solely responsible for this failure. As a result, theyclaim they were denied an opportunity to present their defence in breach of the rulesof natural justice.[2] The question on this appeal is whether it would be contrary to the public policyof New Zealand to enforce the award. Article 36(3) of sch 1 of the Arbitration Act1996 (the Act) provides that an award is contrary to the public policy of New Zealandif a breach of the rules of natural justice occurred during the arbitral proceedings or inconnection with the making of the award.[3] The High Court found that even if it could be proved that responsibility forthe default on discovery rested solely with the appellants' legal advisors, there was nobreach of natural justice and it would not be contrary to public policy to enforcethe award.1[4] On appeal, the appellants repeat the arguments they made in the High Court.[5] We start by briefly explaining the background to the dispute and the agreementto arbitrate. We then set out the arbitral process in some detail. This is necessary toassess the appellants' contention that through no fault of theirs they had no opportunityto present their defence to the claim and were therefore denied natural justice. We thensummarise the key findings in both the award and the High Court judgment beforeaddressing the submissions on appeal.The dispute[6] The first appellant, Mr Noe, was at all material times living in California.Mr Noe developed an electronic rat trap called the "Raticator". In about 2005, Mr Noeentered into an agreement with Mr Hinds, who lives in New Zealand, for Mr Hinds todistribute these traps in New Zealand and Australia. The traps were supplied byAgrizap Inc, a company controlled by Mr Noe and based in California.1 Ratzapper Australasia Ltd v Noe [2017] NZHC 2931, [2018] NZAR 1 [High Court judgment].[7] Agrizap filed for voluntary bankruptcy under chapter 11 of the United StatesBankruptcy Code in April 2010. In 2012, Mr Noe, Mr Hinds, the respondent(Mr Hinds' company Ratzapper Australasia Ltd), and a new company Mr Noeincorporated in the Cook Islands called Trapco Ltd reached agreement for the futureproduction and distribution of the Raticator traps. The second appellant, Atrap Inc,was incorporated in California to take over distribution from Agrizap.Ratzapper obtained funding from the Bank of New Zealand to meet payments due tothe Chinese-based manufacturers of the traps, including outstanding payments due byAgrizap. The traps would be shipped from China to Ratzapper in New Zealand or toAtrap in California. Ratzapper would be responsible for all payments due tothe Chinese manufacturers and would invoice Atrap for those traps shipped to it.[8] In late 2012 a disagreement over the handling of monies arose between Mr Noeand Mr Hinds. This led to Mr Hinds refusing to release a container of traps to Atrapuntil amounts claimed by Ratzapper were paid.Arbitration agreement[9] The impasse was resolved by a written agreement dated 8 February 2013between Trapco, Ratzapper, Atrap, Mr Hinds and Mr Noe (the February 2013settlement agreement). Mr Hinds agreed to the immediate release of the container andthe parties committed to a process to resolve the underlying dispute.[10] The parties agreed to take reasonable steps to reconcile all transactions onthe bank accounts of Trapco, Ratzapper and Atrap, including by making full disclosureno later than 28 February 2013 of all documentation required to enable the accountingand reconciliation process to be completed. In the meantime, within five working daysof release of the container, Mr Noe was to provide the monthly bank statements ofAtrap for October and December 2012 together with a breakdown of cheque payments,a list of receivables and the stock on hand for those months. He also agreed to providethe monthly bank statements of Atrap for January 2013 within five working days ofreceipt of these from the bank. Mr Noe also agreed to travel to New Zealand on orbefore 15 March 2013 to progress the reconciliation process. The parties agreed tomake any payments required following the reconciliation upon demand.[11] The agreement was to be governed by New Zealand law with exclusivejurisdiction conferred on the New Zealand courts. The parties agreed that any disputewould be determined by arbitration under the provisions of the Act with sch 2applying.[12] Mr Hinds and Ratzapper complied with the agreement by releasingthe container. However, they claimed that Mr Noe did not take any steps to progressthe accounting and reconciliation, did not disclose the documentation required and didnot travel to New Zealand for the purposes of the reconciliation. Mr Hinds andRatzapper therefore sought to invoke arbitration in June 2014. Mr Noe initiallyrefused to agree to the appointment of an arbitrator necessitating an application tothe High Court in September 2014. An order appointing the Hon Rodney HansenCNZM QC as arbitrator was eventually made by consent on 25 November 2014.The arbitrationThe claim[13] Four claims were pleaded in an amended claim dated 24 July 2015.However, we need only describe the sole claim that eventually succeeded.Ratzapper claimed that a full accounting and reconciliation process would have shownthat Atrap was indebted to it in the sum of USD 258,399 for traps supplied betweenApril and December 2012. Further payments were made by Ratzapper betweenMay and December 2012 to satisfy Agrizap debts and by way of loan to Atrap togethertotalling USD 100,000 of which USD 83,186 had been repaid leaving a balanceoutstanding of USD 16,814. The total amount owing was therefore claimed to beUSD 275,213.[14] Ratzapper claimed that if Mr Noe and Atrap had complied with theirobligations under the February 2013 settlement agreement, the total amountoutstanding would have been paid by Atrap because it was then solvent and tradingprofitably. However, as a result of the breach, there was no realistic prospect ofrecovery from Atrap because Mr Noe transferred the trading operation and assets ofAtrap to a new company he incorporated on 30 October 2014 called A Trap USA Inc.Discovery orders and non-compliance[15] On 25 August 2015, the arbitrator made an order requiring Mr Noe to provideby 30 September 2015 an affidavit listing various financial records of Trapco andAtrap including financial statements, general ledgers, bank statements, sales invoicesand receipts, purchase invoices and receipts and stock records. This order wasconfined to those categories of documents that were not opposed by Mr Morgan QCwho was then acting for Mr Noe.[16] On 18 September 2015, the arbitrator declined Mr Noe's application to limitdisclosure of financial records to the period from incorporation to 28 February 2013.The arbitrator found that it was necessary to inquire into the financial position of Atrapafter this date in order to determine Ratzapper's claim that recovery was no longerpossible from Atrap due to Mr Noe's breach of the agreement and the consequentdelay.[17] Mr Noe did not comply with the discovery order. In February 2016, more thanfour months after the due date for completion of discovery, Mr Noe suppliedtwo Dropbox links to various documents and some other materials. Mr McCartney,who has acted throughout for the claimants, explained in detail in a letter dated3 March 2016 why this discovery was woefully deficient, describing it as "piecemeal,haphazard and nowhere near complete". No documents had been supplied in most ofthe specified categories. There were no financial statements, no general ledgers, nobank statements, no sales invoices after December 2012 (despite the arbitrator's rulingthat discovery was not to be limited to the period up to 28 February 2013), no receipts,no purchase invoices and no stock records. Instead of the required discovery, Mr Noeprovided a vast number of irrelevant emails and incomplete and unhelpful lists oftransactions. Mr McCartney noted that some of this information had been extractedfrom Atrap's electronic accounting database and called for a full electronic copy ofthis database to be provided. Mr McCartney concluded his letter by saying heintended to ask the arbitrator for a hearing to enforce the discovery orders. Mr Morganimmediately forwarded a copy of this letter to Mr Noe.[18] Randall Cohen, Mr Noe's American attorney, wrote to Mr Morgan on9 March 2016 saying that he was reviewing the discovery with Mr Noe and wouldrespond in the near future. Christopher Dolin, the chief operating officer ofA Trap USA, sent an email to Mr Cohen, copied to Mr Noe, on 22 March 2016 listingthe discovery provided to date. Mr Dolin concluded his email by saying:Furthermore, and confidentially — I have been able to extract all Quickbooksdata from 6/1/2012 through 3/31/2013, and we could supply a full quickbooksfile if you think that is advisable. This was clearly requested in McCartney'sletter, dated 3/3/2016, item 9. It is possible that providing that informationwould eliminate the objections to "partial discovery" if we provide it.Please advise your thoughts on this.[19] Despite knowing of the major deficiencies in his discovery, Mr Noe did notprovide discovery of the accounting database or any of the other required documentsprior to the arbitrator debarring Mr Noe from defending the claim over eight monthslater, on 6 December 2016.[20] At a conference convened on 5 April 2016, counsel for Ratzapper advised thearbitrator of his intention to apply for an order debarring Mr Noe from defendingthe claim. Timetable directions were made requiring any notice of opposition to befiled prior to 27 April 2016, when Mr Morgan was due to go overseas.[21] Mr Morgan wrote to Mr Noe on 12 April 2016 saying that he did not wish tobecome involved in the intended application debarring Mr Noe from defendingthe claim. He recommended that Mr Noe comply with his discovery obligationsimmediately to obviate the need for this application. However, by the time this letterwas written, Mr Noe had already, on 10 April 2016, instructed new counsel,Mr Colthart, and solicitors, Keegan Alexander, to act for him.[22] On 13 April 2016, Ratzapper and Mr Hinds applied for an order that Mr Noebe debarred from defending the claim if he failed, within 10 working days of the orderbeing made, to comply with the discovery order made by the arbitrator on25 August 2015.[23] This application was discussed at a conference with the arbitrator on27 July 2016. Mr Noe must have known about this conference because he wrote toMr Colthart with reference to it on 25 July 2016 saying he would reassemble andre-send the documents that had already been provided on discovery and discuss withMr Dolin how to overcome the deficiencies complained of by the claimants' solicitors.The following day, Mr Dolin sent Mr Colthart the summary he had prepared on22 March 2016 setting out the documents previously discovered. No new documentswere sent with this email, which was copied to Mr Noe.[24] Mr Colthart attended the conference with the arbitrator on 27 July 2016.In view of the change in Mr Noe's legal representation, and because Ratzapper wishedto file an amended application, the time for filing any notice of opposition tothe debarring application and supporting affidavits was extended to 24 August 2016.A further conference was scheduled for 31 August 2016. Mr Colthart reported toMr Noe following this conference.[25] On 27 July 2016, Keegan Alexander wrote to Mr Noe setting out the terms oftheir engagement. This recorded:[T]he primary issue in the case at present is the adequacy or otherwise ofthe discovery furnished by you and your companies in this proceeding. That isa matter that will require urgent attention in the next month if a formalapplication by the claimants is to be avoided.[26] Ratzapper filed its amended application on 2 August 2016. The only changewas to seek discovery of Atrap's electronic accounting database. The application foran order debarring Mr Noe from defending the claim if he did not comply within10 working days was unaltered.[27] At the conference on 31 August 2016, Mr Colthart advised the arbitrator therewas no opposition to the discovery sought and Mr Noe was working with hisUnited States attorney to assemble the documents. Counsel advised that a further20 working days was needed to complete the task. The arbitrator accordingly directedthat discovery be completed by 28 September 2016 and a further conference bescheduled for 18 October 2016 to review compliance and consider any consequentialorders. Mr Colthart forwarded a copy of the arbitrator's minute recording thesematters to Mr Noe on 2 September 2016 noting "[w]e have another 4 weeks tocomplete discovery."[28] Twelve days later, on 14 September 2016, Mr Colthart wrote again to Mr Noesaying: we need to talk about how best to progress the discovery within the timewe have remaining. We've got until the 28th of September, and so need toaddress what is required pretty smartly. I don't want to waste this opportunityto get the case firmly and squarely back on track for you. It's the bestopportunity you have.[29] On 29 September 2016, Mr McCartney advised the arbitrator that Mr Noe hadnot complied, the extended deadline had passed and accordingly he sought an orderdebarring Mr Noe from defending the claim in terms of the amended application dated2 August 2016.[30] At the next conference on 18 October 2016, Mr Colthart advised thatthe discovery process was taking longer than expected but Mr Noe was now inNew Zealand and Mr Colthart was confident that discovery would be completed nolater than 25 October 2016. The arbitrator extended time for compliance accordinglyand scheduled a further telephone conference for 9 am on 26 October 2016.[31] On the morning of 26 October 2016, immediately prior to the commencementof the conference, Mr Colthart sent an email to Mr McCartney saying:Just a heads up. I have uploaded the discovery documents I have to files inDropbox, and will forward a link to you shortly. There are gaps, which I'mnot happy about, which can be filled (I'm told) by the end of this week.[32] Mr Colthart sent a Dropbox link to Mr McCartney a short time laterand said additional files would be added over the next few days. Christopher Jones, achartered accountant retained by Ratzapper, examined the documents in the Dropboxand stated in an affidavit that most of the folders were empty and there were no newdocuments beyond those provided in February 2016. Mr Jones concluded his affidavitby saying:In short, we are no further ahead than when I made my first affidavit on13 April 2016. Many documents that should have been provided have notbeen provided at all. In particular, the most important accounting documents,being the electronic database, the general ledger and the financial statements,are missing entirely. Those accounting records that have been provided areincomplete and/or mis-described. While some of the material shows part ofthe picture, it is insufficient to establish the whole financial position of Atrapat any particular time.[33] At the conference that morning, Mr Colthart advised the arbitrator that heexpected the outstanding discovery including the electronic accounting databasewould be available within two to three days. While recognising the possibility ofcompliance, the arbitrator made directions for the hearing of Ratzapper's applicationto debar Mr Noe from defending the claim. A half-day hearing was scheduled for30 November 2016.[34] Immediately following the conference on 26 October 2016, Mr Colthart sentan email to Mr Dolin, copied to Mr Noe, asking him to send the full electronic copyof the accounting file for Atrap "quickly". Despite this urgent request, the electronicfile was not sent until 17 January 2017, more than a month after Mr Noe had beendebarred from defending the claim due to his persistent failure to comply withthe discovery order.Mr Noe debarred from defending[35] Ratzapper filed and served its evidence of Mr Noe's default and itssubmissions in support of the application on 11 November 2016. Nothing was filedin response.[36] The hearing proceeded as scheduled on 30 November 2016. Mr Colthartsubmitted that an order debarring Mr Noe from defending the claim would be adisproportionate response given Mr Noe had not refused to comply with the order, hehad partially complied with it and his only default was in failing to do so in a timelymanner. The arbitrator rejected this submission because the evidence demonstratedthat no real attempt had been made to remedy the deficiencies in discovery. As alreadynoted, many of the folders provided were empty and the electronic database, generalledger and financial statements were missing entirely. The arbitrator observed thatMr Noe had not taken the opportunity to explain the deficiencies and had been onnotice that a refusal to comply would have the consequence that he would be debarredfrom defending the claim. In the absence of any explanation, the arbitrator consideredthe only available inference was that the default was "persistent, flagrant anddeliberate". The arbitrator accordingly made an order on 6 December 2016 debarringMr Noe from defending the claim.[37] Mr Noe says he was not told about this hearing or the outcome of it until23 December 2016 when Mr Colthart sent him a copy of the arbitrator's ruling and abrief report on the hearing. Mr Colthart suggested that the order could be "lifted" ifthe defaults were remedied. He again asked Mr Noe to send the electronic accountingfile. A Dropbox link to this file was sent by Mr Dolin to Mr Colthart on17 January 2017.[38] On 4 May 2017, Mr McCartney applied for a formal proof hearing.Mr Colthart sent a copy of this application to Mr Noe the following day. Mr Noeresponded saying: we sent to you all of the accounting information many months ago that theyhad requested. I am surprised that they are still continuing with this debarringprocess. After fulfilling our obligation in discovery I thought you had takensteps to assure that there was no further debarring of us in this arbitration.I imagined that you had reached a stipulation with opposing counsel.Please let's talk on Monday.[39] Mr Colthart advised the arbitrator on 22 May 2017 that he was instructed tooppose the application for a formal proof hearing. The arbitrator responded that hewould hear from him by telephone at the commencement of the hearing but wasunclear what purpose would be served by this given Mr Noe had been debarred fromdefending the claim. In those circumstances, Mr Colthart did not attend.The principal award[40] The formal proof hearing took place on 22 May 2017. In his award dated7 June 2017, the arbitrator said he was satisfied that if Mr Noe had honoured hisobligations under the February 2013 settlement agreement, Atrap would have beenable to meet its obligations to pay Ratzapper USD 273,857.50, the amount found tobe due. The arbitrator found that as a result of Mr Noe's default and the transfer ofAtrap's business to A Trap USA in October 2014, Ratzapper was left with a"greatly diminished" prospect of recovery from Atrap. The arbitrator accordinglyfound Atrap and Mr Noe liable to pay Ratzapper the sum of USD 273,857.50.The arbitrator also awarded Ratzapper interest on the debt at the rate of five per centper annum from 30 March 2013, being USD 56,797.30.The costs award[41] In a subsequent award dated 17 October 2017 the arbitrator ordered Mr Noe topay costs totalling NZD 80,000.Application to enforce the award[42] On 30 June 2017, Ratzapper applied to the High Court for enforcement ofthe principal award as a judgment in reliance on art 35 of sch 1 of the Act. Atrap andMr Noe opposed the application contending the award was invalid because Mr Noehad been denied an opportunity to be heard in breach of the principles of naturaljustice.[43] On 8 September 2017, Mr Noe separately applied for an order for refusal ofrecognition and enforcement of the award. This application was made on the groundthat recognition or enforcement of the award would be contrary to the public policy ofNew Zealand as expressed in s 27(1) of the New Zealand Bill of Rights Act 1990which assures the right to the observance of the principles of natural justiceby any tribunal.[44] Mr Noe stated in a detailed supporting affidavit sworn on 19 October 2017 thatMr Colthart did not keep him informed about the progress of the arbitration and hewas not told about the application to debar him from defending the claim orthe arbitrator's subsequent order to that effect. Mr Noe said he arranged for Mr Dolinto provide discoverable documents to Mr Colthart on 26 July 2016 by sendingDropbox links. Mr Noe stated that Mr Colthart did not acknowledge receipt of thisemail until three months later, on 26 October 2016. This was the morning ofthe conference with the arbitrator when directions were made for the hearing ofRatzapper's application to debar Mr Noe from defending the claim because of hisnon-compliance. Mr Noe claimed he was not sent a copy of the arbitrator's minute ofthis conference, nor was he aware of it.[45] Mr Noe further stated that he did not receive a copy of the claimants'submissions dated 11 November 2016 in support of their application to debar him fromdefending the claim. He said he was not aware of the hearing on 30 November 2016which led to the order debarring him.[46] In summary, Mr Noe stated that he was not advised that he was in jeopardy ofbeing debarred from defending the claim. He accepted that this issue had been raisedearlier in the arbitration process but claimed he was "never informed that this remaineda live issue in the second half of 2016".High Court judgment[47] Muir J was not persuaded that enforcement of the award would be contrary tothe public policy of New Zealand even if it could be established that the award wasobtained through counsel error or default:2 the present case arises in the arbitration context where there is a highpremium on finality and certainty and where failure to uphold the surrogacyprinciple would significantly impact on that objective by potentially exposingawards to minute examination of counsel performance. At least in cases suchas the present, involving a monetary claim and where there is no suggestionof incompensable loss, it is not in my view contrary to the requirements ofjustice for the Court to recognise an arbitral award under art 35 despitearguable counsel error or breach in the process by which that award wasreached.[48] The Judge accordingly made an order enforcing the award by entering it as ajudgment of the Court.3[49] On 10 July 2018, Muir J entered judgment by consent enforcing the arbitrator'scosts award.Submissions[50] Mr Cox, for the appellants, submits that Mr Noe should not have been orderedto provide discovery of Atrap's records because he had no control over those2 High Court judgment, above n 1, at [51].3 At [54].documents; Mr Hinds was the sole director of Atrap. Mr Cox says the discovery orderwas only made because of counsel's "abdication" of his role as Mr Noe's advocate.[51] Mr Cox submits that Mr Noe had no knowledge of critical aspects ofthe procedural steps taken in the arbitration. He says Mr Noe understood thatMr Dolin supplied Mr Colthart with all required discovery documentation in his emaildated 26 July 2016 and advised him the Quickbooks data file was readily available ifneeded. Mr Cox says Mr Noe was not aware of the amended application or that therewould be a further conference with the arbitrator on 18 October 2016. DespiteMr Colthart advising the arbitrator that Mr Noe was in New Zealand and he expectedto meet with him shortly, no such meeting took place. Mr Cox says Mr Colthart didnot send Mr Noe a copy of the arbitrator's minute of 18 October 2016 extendingthe date for compliance to 25 October 2016. Mr Noe was also unaware of the ordersmade on 26 October 2016 to progress the application to have Mr Noe debarred fromdefending. Nor did Mr Noe receive the subsequent materials filed on11 November 2016 in support of this application. Mr Noe was not told aboutthe hearing on 30 November 2016 or the order debarring him until 23 December 2016.[52] In summary, Mr Cox submits there has been a breach of natural justice because,through no fault of Mr Noe's, he was deprived of the opportunity to present hisdefence. Mr Cox argues that where an aggrieved party is wholly innocent, it does notmatter whether the breach of natural justice was caused by the Tribunal, the opposingparty or the innocent party's own legal advisors. He relies on the decision of the Courtof Appeal of England and Wales in R v Diggines, ex parte Rahmani.4 Mr Cox submitsthis Court should follow the reasoning in that case despite it being overruled bythe House of Lords in Al-Mehdawi v Secretary of State for the Home Department.5[53] Mr Cox places particular reliance on the more recent decision of the Court ofAppeal of England and Wales in FP (Iran) v Secretary of State for the HomeDepartment.6 In that case, an Iranian asylum-seeker, through no fault of hers, wasunaware of the hearing before the Asylum and Immigration Tribunal (the Tribunal)4 R v Diggines, ex parte Rahmani [1985] QB 1109 (CA) at 1119.5 Al-Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 (HL).6 FP (Iran) v Secretary of State for the Home Department [2007] EWCA Civ 13.and her appeal was heard and determined against her in her absence.7 She did notknow about the hearing because her solicitors had failed to inform the Tribunal of hernew address.8 Sedley LJ acknowledged that errors of representatives can sometimesbe imputed to their clients.9 He described this form of imputed fault as the "surrogacyprinciple".10 However, he considered there was no general principle of law that fixesa party with the procedural errors of her representative and the surrogacy principlewas not one of universal application.11 In some refugee cases, the exercise of the rightto be heard may literally be a matter of life and death.12 Sedley LJ said it was thereforeunsurprising that the surrogacy principle had not been uniformly adopted or applied.13[54] Mr Cox says that this approach, sometimes followed in refugee cases, shouldbe extended to private law disputes where the claimant would otherwise be left withouta remedy. This would include parties not heard through no fault of theirs in arbitralproceedings under the Act where there is no right to seek a rehearing. Mr Cox arguesthat, as in the refugee cases, Mr Noe is facing "irretrievable and incompensable loss"because Ratzapper has sought to enforce the judgment by applying for a writ of saleover Mr Noe's unique and valuable property on the Coromandel Peninsula.[55] Mr Cox mounts an alternative argument that art 36(1)(b) of sch 1 of the Act isexpressed in sufficiently wide terms to enable the Court to intervene where to enforcethe award would constitute a substantial wrong or miscarriage of justice. Mr Coxinvites the Court to adopt an approach similar to the ground of review sometimesadvanced in a public law context as the "innominate ground" or "the residualdiscretion". He says this ground has the potential to be applied "across the entiretheatre of decision-making" and justifies the court's intervention where "somethinghas gone seriously wrong in the decision-making process".7 At [1].8 At [3].9 At [32].10 At [32].11 At [46].12 At [43].13 At [44].Discussion[56] Mr Noe's evidence has not been tested on cross-examination, nor has therebeen any response to it from his former legal advisors. Like Muir J, we cannot makeany findings as to whether Mr Noe's legal advisors have any responsibility forthe default and it would be inappropriate to do so in view of Mr Noe's claim againstthem in other proceedings. However, even viewing Mr Noe's evidence in its mostfavourable light, we are not persuaded he had no responsibility for the default ondiscovery which led to him being debarred from defending the claim. For the reasonsthat follow, this fundamental factual premise underpinning Mr Noe's argument is notmade out on his own evidence.[57] We cannot accept Mr Cox's submission that it was only the result of counselabdicating his responsibility that an order was made requiring Mr Noe to providediscovery of Altrap's documents. This submission is not tenable on the evidence.[58] First, Mr Noe covenanted in the February 2013 settlement agreement toprovide monthly bank statements for Atrap within five working days of release of thecontainer by Mr Hinds to Atrap. It is not possible to reconcile this commitment withMr Noe's claim that Mr Hinds was in control of Atrap, not him. Equally, it makes nosense that Mr Hinds would be seeking the release of the container as the controller ofAtrap and at the same time refusing to release it on behalf of Ratzapper.[59] Secondly, Mr Morgan consented to part, but not all, of the original discoveryapplication. Mr Cox confirmed that no complaint is made by Mr Noe aboutMr Morgan's conduct of the matter on his behalf. It can be safely assumed that heacted on Mr Noe's instructions in consenting to part of the application, which wasentirely directed to discovery of documents of Atrap and Trapco.[60] Thirdly, Mr Noe did provide limited discovery of Atrap's financial records andwas able to direct that the full electronic financial database for Atrap be provided.[61] Nor do we accept that Mr Noe can fairly claim to have no responsibility forthe default on discovery. In terms of the February 2013 settlement agreement, Mr Noecommitted to providing the relevant records no later than 28 February 2013. It washis ongoing failure to do so that led to Mr Hinds invoking the arbitration agreement inJune 2014 and the eventual appointment of the arbitrator by the High Court inNovember 2014. Mr Noe was well aware of the discovery order made by the arbitratorin August 2015 requiring Mr Noe's compliance by 30 September 2015. It is beyondargument that Mr Noe did not comply; indeed, he does not contend otherwise. Mr Noereceived a copy of Mr McCartney's letter dated 3 March 2016 setting out in detailthe gross deficiencies in the discovery that Mr Noe had provided in February 2016.Despite this and numerous reminders, Mr Noe never provided any further discoveryuntil after he was debarred from defending the claim.[62] Mr Noe's claim that he understood Mr Dolin had provided counsel witheverything required on 26 July 2016 and offered to provide the electronic databasedoes not withstand scrutiny. Mr Noe himself stated in an email to Mr Colthart on25 July 2016 that he proposed to "reassemble the documents that have been providedand resend them to you so you have this background". Mr Dolin's email of26 July 2016 did no more than that. He simply sent a copy of the email he hadoriginally sent to Mr Cohen and Mr Noe on 22 March 2016 responding tothe 3 March 2016 complaint about the "piecemeal, haphazard and nowhere nearcomplete" discovery. Mr Dolin's 22 March 2016 email set out the discovery providedin February 2016 and noted "confidentially" that the objections to "partial discovery"could be eliminated if a full copy of the Quickbooks database was provided.[63] Even if this had been a refugee case and the approach adopted in FP (Iran) wasapplicable, this would not avail Mr Noe because he cannot say he was not given anopportunity to defend the claim solely due to the fault of his legal advisors.The responsibility to provide discovery rested with him and his non-complianceappears on the evidence to have been both persistent and flagrant, as the arbitratorfound.[64] In any event, we can see no justification in a case such as the present fordeparting from the general rule that a party is bound by steps taken by a barrister orsolicitor on their behalf acting within the scope of his or her retainer in litigation.To permit a departure from this rule in an arbitration context would seriouslyundermine the finality and enforceability of arbitral awards, contrary to the purposesof the Act. As Muir J observed, it would mean that any unsuccessful party in anarbitration would be able to contest enforcement of the award by raising claims ofcounsel error. Further, unlike an asylum-seeker who may face torture or persecutionif returned to their home country without a hearing, Mr Noe does have an effectiveremedy against his legal advisors if he can demonstrate he has suffered loss throughnegligence on their part.[65] Mr Noe has failed to establish a breach of natural justice. Whether or not thereis room for criticism of his legal advisors, it is clear Mr Noe was given ampleopportunity to comply with the discovery order made against him in August 2015.His failure to comply persisted for over 12 months and appears from the evidence tohave been deliberate. The arbitrator extended the deadline for compliance numeroustimes and was entitled to debar Mr Noe from defending the claim when he still did notcomply.[66] Even if it were the test, we see no indication of a miscarriage of justice.Mr Noe does not explain in either of his affidavits what his defence to the claim wouldhave been. The claim that he breached his obligations under the February 2013settlement agreement seems unanswerable. He has not disputed the debt claimed tobe due by Atrap to Ratzapper. Nor does he say that Atrap was not able to pay this debtat the relevant time, in March 2013. Further, we note from the email sent byMr Colthart to Mr Noe on 14 September 2016, which Mr Noe appended to hisaffidavit, that Mr Noe offered to pay NZD 500,000 to settle the claim in mid-2015.This is roughly equivalent to the amount of the arbitration award.Conclusion[67] Recognition or enforcement of the arbitral award may be refused only ifthe Court is satisfied that it would be contrary to the public policy of New Zealand todo so. Mr Noe's evidence falls well short of establishing this. The appeal mustaccordingly be dismissed.Result[68] The appeal is dismissed.[69] The appellants are jointly and severally liable to pay the respondent costs for astandard appeal on a band A basis and usual disbursements.Solicitors:Rennie Cox, Auckland for AppellantsTruman Wee & Associates, Hamilton for Respondent